Prologis to acquire Duke Realty for $26B
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San Francisco-based Prologis Inc. (NYSE: PLD) has inked an agreement to acquire Duke Realty Corp. (NYSE: DRE) in Indianapolis in a $26 billion all-stock deal. The logistics real estate firm says the boards of directors for both companies have unanimously approved the acquisition.
Prologis says the acquisition will add a number of high-quality properties in multiple markets, including southern California, New Jersey, south Florida, Chicago, Dallas and Atlanta to its portfolio.
The company says when the deal is complete, it plans to hold approximately 94% of Duke’s assets and exit one market, though which market that would be was not specified.
“We have admired the disciplined repositioning strategy the Duke Realty team has completed over the last decade,” Prologis co-founder and CEO Hamid Moghadam said in written remarks. “They have built an exceptional portfolio in the U.S.-located in geographies we believe will outperform in the future. That will be fueled by Prologis’ proven track record as a value creator in the logistics space.”
Prologis did not specify if any of Duke’s 172 employees would be affected. However, Chief Investment Officer Eugene Reilly made a brief mention about the workforce during a conference call with investors Monday morning.
“We hope to retain a number of Duke’s team to manage the portfolio assets and to serve in other currently open positions at Prologis,” Reilly said.
Under the agreement, Duke Realty shareholders will receive 0.475 of a Prologis share for each Duke share they own.
Duke is the 11th-largest public company in the Indianapolis area, according to IBJ research, with nearly $1 billion in revenue in 2020. The company has more than 150 million square feet of operating properties in 19 U.S. markets.
The announcement comes almost one month to the day after Duke rejected a previous $24 billion offer from Prologis, calling the proposal “insufficient.”
“We have always respected Prologis, and after a deliberate and comprehensive evaluation of the transaction and the improved offer, we are excited to bring together our two complementary businesses,” said Duke Realty Chairman and CEO Jim Connor. “Together, we will be able to accelerate the potential of our business and better serve tenants and partners.”
The acquisition remains subject to shareholder approval and is expected to close in the fourth quarter. After the close, Connor will join the Prologis Board of Directors.